Most of us try to live in the world where we try to follow the world, which is a very good thing because much of the way society works is the based on those values. The more people follow the law, the easier the whole process works, then it comes to making profits.

In an article by Rita Trichur of the Globe and Mail, while many citizens follow the law and the intent of the law, the government is sending different signals in the marketplace. In the global marketplace when countries do not like what other countries are doing, they impose things such as sanctions. Do the sanctions help or hurt? For example the US has imposed sanctions on oil selling by Iran.

The Financial Crimes Enforcement Network or FinCEN, an arm of the US Department of Treasury, issued a new alert urging financial institutions to detect and disrupt illicit financial flows from black-market oil sales that benefit Iran.

Financial institutions should be on notice that they have a responsibility to detect suspicious activity and stop it in its tracks.

Washington is prepared to take action against any foreign company including airlines and shipping companies that support illicit energy sales to Iran.

On the surface this is good, but in reality, energy smuggling is becoming normalized because the Trump administration has spend months undermining the integrity of the US sanctions regime.

In January, the US changed the President of Venezuela and then selectivity rolled back sanctions to facilitate the transport and sale of Venezuelan crude and oil products to global buyers.

It was a stunning development and initially, roughly $500 million was deposited in a US controlled account in Qatar, before going to Venezuela, according to US officials. In February, US Energy Secretary Chris Wright told NBC News the US had signed agreements to sell $5 billion worth of Venezuelan crude to foreign buyers. Some of the oil went to US refineries and some to Europe.

The proceeds are supposed to benefit the American and Venezuelan people. But the problem is if Americans are getting a cut of the profit, this emboldens Venezuelan oil smugglers.

At the start of the war, the US relaxed sanctions on Iranian and Russian oil to try to prevent an increase in world oil prices. The reality is both Iran and Russia has benefited from higher world oil prices,

What you have is very mixed messages from the administration – the US Treasury says sanctions are bad and the abuse is getting worse. The President seems to want less sanctions. What does the market do?

Linking to dividend paying stocks, when the government does not get its act together, it sends mixed messages, in the case of oil, similar to most commodities, the price is dependent on global markets not domestic markets. When the price increases, domestic commodity firms automatically benefit from higher prices. This will last until the government gets it act together, meanwhile the domestic firm increases their share buybacks and offers a special dividend.

There are more questions than answers, till the next time, to raising questions.